Listen and subscribe to our podcast: Apple Podcasts | Spotify
As soon as the summer hail storms pass, roofing contractors arrive in Eric Neu’s Woodbury neighborhood.
He’s watched them go door-to-door offering free inspections, sometimes leading to a new roof or siding covered by insurance. After a hailstorm a few years ago, Noah’s insurance company paid for his aluminum siding and asphalt roof to be replaced. The same company covered the last roof replacement on his home a decade ago.
He was shocked.
“We didn’t even think about replacing the roof,” said Noah, 58. “Every house in our neighborhood was re-shingled and re-roofed, completely covered.”
Having lived in Indiana and Connecticut, Noah said it seems to be more routine in Minnesota for insurance to cover roof replacement after a hailstorm. He sought clarity on the matter from Curious Minnesota, the Star Tribune’s reader-generated reporting project, and wondered if that meant home insurance premiums in Minnesota were higher than those in other states.
“We’re paying for it one way or another,” he added.
It doesn’t appear that insurance companies in Minnesota treat roof replacements any differently than other states, but roof replacements may be more prominent recently as the state sees a spike in hail in 2022 and 2023.
Minnesotans pay higher homeowners insurance premiums than most other states, but state-by-state insurance comparisons are difficult because of the number of variables.
Insurance reduction
Storms may have damaged many roofs recently, but the fully covered roof replacements Neu experienced are becoming increasingly rare.
With more frequent extreme weather across the country, some insurance companies are no longer paying the full cost of replacing roofs that were installed 10 or 15 years ago. Instead, they pay the depreciated actual cost of the roof instead of the replacement cost — or require a higher deductible to pass the cost on to homeowners, among other changes.
“Everybody thinks that when a storm comes, they’re just going to have a brand new roof,” said Aaron Cocking, CEO of the Insurance Federation of Minnesota, a trade group of insurers. “And you’re starting to see a shift in the market on that. … There’s still coverage, but we’re paying for the actual cost remaining on that roof.”
2022 was the costliest storm year on record for Minnesota, according to the state Department of Commerce, with storms causing $6.3 billion in property damage. Then in August 2023, a hail and wind storm caused over $1 billion in property damage in the Twin Cities and central Minnesota.
“It adds up quickly,” said Commerce Commissioner Grace Arnold. “The climate is changing, and that means the risk to a particular homeowner … is changing. And prices are adjusted to reflect that.”
While Minnesota doesn’t experience catastrophic hurricanes like southern states or wildfires that tear through western states, strong thunderstorms can still cause widespread damage in the densely populated Twin Cities, Arnold said.
This is especially true lately. Minnesota ranks third in 2022 among states with the most hail, ahead of Nebraska and Texas, according to the U.S. Department of Commerce. Minnesota was the top state in the country for hail claims that year with State Farm citing nearly $800 million in damages.
But Pete Bulay, a climatologist with the State Climatology Office, said the frequent hail events in 2022 and 2023 were anomalies and the state is not seeing a pattern of more frequent hail.
No “loose” roof
The amount homeowners seek in claims may also rise as roof and siding replacements become more expensive due to rising labor and supply costs.
The state has roughly 20 percent fewer roofers than it did a few years ago, based on state data. And the average hail claim has nearly doubled in the past decade to nearly $30,000, according to the Insurance Federation of Minnesota.
These more expensive, more frequent shifts have contributed to higher insurance premiums. In 2021, the average premium Minnesota homeowners paid for their coverage was $1,607, a jump of more than 50% since 2011 – far outstripping inflation.
Cocking said insurers have also taken a hit. Insurers paid out $1.92 in claims for every $1 paid by Minnesota homeowners in 2022, according to the Casualty Insurance Association of America.
“Something has to change,” Cocking said, adding that insurers are reducing coverage in the interest of “taking care of all the policyholders who are paying higher premiums.”
Insurers have added new exclusions to narrow coverage or increased the amount of deductibles homeowners must pay for wind and hail damage claims, leaving more Minnesotans on the hook to pay possibly tens of thousands of dollars.
“This draining of coverage by insurance agencies is something we’re seeing more and more across the country,” said Doug Heller of the Consumer Federation of America, a consumer advocacy group, who described the trend as unfair to financially vulnerable people. “It’s going to create a class of people who can’t afford to own a home in Minnesota because they can’t get the coverage they need.”
Some users are not happy with this. Last year, the state Department of Commerce saw a spike in complaints about denied claims or increased out-of-pocket costs. The state agency filed nearly 1,200 home insurance complaints, double the number received in 2020.
The Commerce Department investigates complaints and can take action if state law has been violated, including requiring a company to refund policyholders. The department also reviews insurers’ rates and can call a public hearing if they rise 25 percent or more in a year. But Arnold said that hasn’t happened because the threat of a public hearing is causing the company to lower prices.
For homeowners who can’t afford the expensive bill to replace their roof, Minnesota Housing offers loans — including forgivable loans for low-income homeowners — to pay for a roof or other housing projects. The agency overall has seen an increase in homeowners getting loans over the past six years, especially in 2023.
Tips for homeowners
Arnold recommended that homeowners review their policy and ask their insurance agent what it is no covered to understand the limitations. Check what has changed in the policy before you renew it and shop around to get multiple quotes.
“I think it’s tempting to just buy your insurance and pay it every year,” Arnold said. “As premiums increase … You can make smart choices about what you want covered and where you can take some risk yourself.”
To avoid a fraudulent business, homeowners should check the contractor’s ratings and go to dli.mn.gov to see if the contractor is licensed by the state — or has a disciplinary record. State law also allows homeowners to cancel a roofing contract, with certain limitations, if their insurance denies the claim.
If you would like to submit a question to Curious Minnesota, please fill out the form below:
Read more interesting stories from Minnesota:
Why was I-94 built through St. Paul’s Rondo neighborhood?
Why does Minneapolis keep planting trees under power lines?
Why are vehicle tabs more expensive in Minnesota than in other states?
Minneapolis is plowing its driveways. Why not St. Paul?
Why is Minnesota the only continental state with an abundance of wolves?
Why is Minnesota more liberal than neighboring states?
